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The Trouble With Disney’s Great Man Theory

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Disney has been a winning stock since Bob Iger took over from Michael Eisner in 2005, with the stock rising 300%. Under Eisner’s guidance, the company was faltering, with a hostile takeover bid and disgruntled shareholders. Iger made a series of smart acquisitions, including Pixar, Marvel and most recently, LucasFilms. Iger retained the talent at the companies bought by Disney, expanded the brands to include sequels, action figures and other toys, and has restored Disney’s former glory; some would say, expanded it into an entertainment power house, as discussed on Motley Fool.

The best is yet to come for Disney, some would say, with upcoming releases of “Star Wars” films and the opening of a theme park in Shanghai. There is one major problem; What will happen to Disney when Iger leaves? The CEO’s contract has been extended until 2018, but it is possible that he may retire before that. Luckily, Iger retained enough talent in the bloodlines of the companies he bought to keep them strong, but where is the genius that will coordinate the disparate elements? Motley Fool mentions that CFO Jay Rasulo and the parks and resorts chairman Thomas Staggs, might be candidates, but both lack Iger’s media experience, which he gained at ABC.

Disney’s great strength, in the form of Bob Iger, may be its biggest weakness. Warren Buffett said that Coca-Cola’s brand was so strong that even a “ham sandwich” could run the company. Disney is also a strong brand, but it depends on brain and innovation behind the brand, and it is a company with a “great man theory, “; once the master CEO retires, the future will be uncertain.

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